Question

Question 2

Ms Laila is running a small electronic shop at Qurm Heights and as at 31st August 2020 she is expecting to prepare a bank reconciliation statement. She is incompetent in preparing her cash book and seeking your advice to do the same. Her banking transactions are as follows.:

Opening Bank Balance: OMR 50 000 (Dr Balance)
Cheques Received	Cheques Issued
Anu LLC OMR 20000	Mohammed OMR 6000
Rabia SAOG 23000	Nafiya 5700
Ahmed Bros 2500	Sacky 1200
Nadee Enterprises 1200	Obrid 3500
The Café-Coffee shop 8000	Khalis 14000
Rao Bro 12000	Nuroo 1250
Fatin and Others 7600	Nameed 1350

(a) Take the opening balance, THREE of ‘Cheque Received’ and THREE of ‘Cheques Issued’ and Prepare her cash book for the month of August 2020 (Selection is from your own choice).

Assume that you have the following information for your reference:

Closing Bank Statement Balance: OMR 40000 (Cr Balance) Updated Bank Balance as per the cash book: OMR 32800 (Dr Balance)
Cheques drawn but not yet presented OMR 20000	Cheques deposited but not yet credited OMR 12800

(b) Prepare bank reconciliation statement as of 31st August 2020 starting from the Closing Bank Statement Balance.

Answer 1

Particular	Amount (Dr.)	Particular	Amount (Cr.)
To opening Balance b/d	50000	By Mohammed	6000
To Anu LLC	20000	By Nafiya	5700
To Rabia SAOG	23000	By Sacky	1200
To Ahmed Bros	2500	By closing balance c/d	82600

This is just an extract of account with 3 cheques received and 3 cheque issued.

Entry for cheque received:

Bank A/C Dr.

To Account receivables A/C

For example: Cheques received from Anu LLC OMR 20000.

Bank A/C Dr. 20000

To Anu LLC A/C 20000

Entry for cheque issued:

Account Payable A/C Dr.

To Bank A/C

For example: Cheque issued to Mohammed OMR 6000.

Mohammed A/C Dr. 6000

To Bank A/ C. 6000

b) Bank Reconciliation statement.

Particulars	Amount
Closing Bank statement balance	40000
Less : Cheque drawn but not yet presented	20000
Add : Cheque deposited but not yet credited	12800
Closing Bank balance as per cash book	32800

Cheque drawn but not yet presented : It means that the cheque is issued by Ms. Laila . So the entry for cheque is recorded in her books as Account payable A/C Debit And Bank A/C credit. The bank balance is decreased due to issue of cheque and this is recorded in Laila's book. But since the cheque has not been presented imy the bank the entry for issue of cheque is not reflected in the bank statement. So will deduct the amount for cheque issued as the cheque issue results in decrease of Bank balance.

Cheque deposited but not yet credited : It means that the cheque has been received from the customer and are deposited into bank for collection. Entry for cheque deposited is BankA/C Debit and Account receivables A /C credit. Since Bank account is debited it means the bank balance is increased due to deposit. But bank credits the account only when cheque is cleared. Since the amount has not been credited by bank the bank balance as per bank statement is not reflecting the deposit. So we will add the cheque deposited to make it in line with the Balance as per our books.

Hooe you get it.